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treack
24 posts

Posted by treack > May 4, 2021 8:05 PM | Report Abuse

Thanks for the insight Mr Tan.
In the Harta Quarterly Report, they did mention that their ASPs are still on the rise, and the underwhelming revenue is due to shipping container shortage- and yet, their revenue still increased. My question is, is there a way we can derive the ASP increase percentage for this quarter juxtaposing the data from Department of Statistics


Ben Tan
420 posts

Posted by Ben Tan > May 4, 2021 8:29 PM | Report Abuse

treack, thank you for your comment.

Harta released their investor presentation. According to the slides, their sales volume for the quarter was 6.7 billion pieces. That makes ASP of RM343 ($83) for the quarter. Last quarter their ASP was RM224 ($55). That's an increase of 50% q-o-q.


LimitUp
284 posts

Posted by LimitUp > May 4, 2021 8:53 PM | Report Abuse

I will top up TG on retracement. Hopefully there is a chance for that. Glove counters price movement is so irrational now. Even crazier that Bursa de casino


speakup
18350 posts

Posted by speakup > May 4, 2021 8:53 PM | Report Abuse

https://www.malaymail.com/news/malaysia/2021/05/02/report-ismail-sabri-rejects-news-report-of-possible-mco-3.0-says-nsc-yet-to/1971083

this guy is penipu BESAR! Yesterday say no MCO, today say got MCO.
PENIPU BESAR!


Ben Tan
420 posts

Posted by Ben Tan > May 4, 2021 11:20 PM | Report Abuse

LimitUp, speakup, thank you for your comments.

speakup, as the healthcare system in certain states is currently flooded and running at close to 100% capacity, I don't think anything other than a tightening of restrictions is possible to be honest. The real question is how much tightening will be imposed, and if that amount of tightening will have the needed effect. Based on today's announcement, I am not too optimistic.


pjseow
1055 posts

Posted by pjseow > May 5, 2021 6:16 AM | Report Abuse

Ben Tan Thanks for compiling the glove export data . I think the most likely scenario is scenario 2 . I estimate the PAT margin to be 58 % . With this margin ,the supermx earning may hit 3.12 x 0.58 = 1.81 billion.


Brutus
70 posts

Posted by Brutus > May 5, 2021 6:48 AM | Report Abuse

@Ben Tan, another excellent piece of write up. For long term investors (Buy and Hold) I do not think there is a better sector to put money in especially for the amount of dividends that glove makers are giving out (except the 2nd liners).


Ben Tan
420 posts

Posted by Ben Tan > May 5, 2021 10:11 AM | Report Abuse

pjseow, Brutus, thank you for your comments.

pjseow, yes, it does seem like scenario 2 is the "average" case. My assumption for net profit margin would be a bit lower though. This is probably a good time to mention that before yesterday my estimate for Supermax's quarterly results was significantly lower based on previous guidance by the company. However, with Harta's "lukewarm" results and the exports figures showing a significant increase m-o-m and q-o-q, it is hard to explain the difference in any other way. The second liners don't have the capacity to cover a big part of the gap.

Brutus, I don't like to talk bad about companies, so I have not been writing much about the second liners. They are 3 very different businesses, and while some will likely do better than others in the future, my personal expectation is that (most of) the big boys will do best overall.


CharlesT
11525 posts

Posted by CharlesT > May 5, 2021 10:22 AM | Report Abuse

Posted by pjseow > May 5, 2021 6:16 AM | Report Abuse

Ben Tan Thanks for compiling the glove export data . I think the most likely scenario is scenario 2 . I estimate the PAT margin to be 58 % . With this margin ,the supermx earning may hit 3.12 x 0.58 = 1.81 billion.


Rm1.81B????????? 80% higher than last Q?????????????


trueinvestor
248 posts

Posted by trueinvestor > May 5, 2021 10:50 AM | Report Abuse

Thanks for the precise info Mr Tan


pjseow
1055 posts

Posted by pjseow > May 5, 2021 12:36 PM | Report Abuse

Ben Tan , Harta "lukewarm" result was hit by the unexpected 6.7 billion shipment which was way below its previous qtr 9.5 billions. This unexpected drop was due to shutdown arising from preventivr measures on covid infections plus shortage of containers. Despite such drastic lower shipment, Harta can still produce a qoq improvements which was attributed to the 50% increase in ASP.


Ben Tan
420 posts

Posted by Ben Tan > May 5, 2021 12:43 PM | Report Abuse

CharlesT, trueinvestor, pjseow, thank you for your comments.

pjseow, we are running a bit off-topic (I may indeed write that article on Harta), but just to confirm - elsewhere I wrote about this, and about the fact that their inventories have increased by almost RM300 million q-o-q. That was not my point when I pointed to the lukewarm quarter. My point was that based on my simple model explained in this article, as Harta reported lower than expected revenue from sales, and as exports of gloves have increased by more than expected, the gap (i.e. the difference in these expectations) must have come from somewhere, and the most likely "culprit" would be Supermax.


pjseow
1055 posts

Posted by pjseow > May 5, 2021 12:43 PM | Report Abuse

Charles T, the estimation is purely mathematical by using Ben 's scenario 2 3.12 b revenue and my estimate of 58 % margin . The previous qtr margin already hit 53 % margin. Hence, with 50 % ASP increase , 58 % assumption is considered conservative.


Kyou
1223 posts

Posted by Kyou > May 5, 2021 12:57 PM | Report Abuse

PAT should be around 1.37B ... juz i guess ..XD


batman666
384 posts

Posted by batman666 > May 5, 2021 1:20 PM | Report Abuse

Excellent analysis based on facts and figures Sifu Ben Tan.


Jack Khan
909 posts

Posted by Jack Khan > May 5, 2021 2:05 PM | Report Abuse

wow if 3.5b revenue = 1.75B PAT is it possible ?


CharlesT
11525 posts

Posted by CharlesT > May 5, 2021 5:24 PM | Report Abuse

Rm1B only.....meaning to say the estimation is not chun at all


CharlesT
11525 posts

Posted by CharlesT > May 5, 2021 5:24 PM | Report Abuse

More on kaki kong kaki song.....


abang_misai
1911 posts

Posted by abang_misai > May 5, 2021 5:26 PM | Report Abuse

Supermx gone case


CharlesT
11525 posts

Posted by CharlesT > May 5, 2021 5:26 PM | Report Abuse

Like it or not, hv to accept the fact that ASP oredi peaked n very likely to go down or oredi came down


Foker
914 posts

Posted by Foker > May 5, 2021 6:03 PM | Report Abuse

Ben Tan must get a shock of his life to see Supermax underperform so bad


Ben Tan
420 posts

Posted by Ben Tan > May 5, 2021 10:53 PM | Report Abuse

Kyou, batman666, Jack Khan, CharlesT, abang_misai, Foker, thank you for your comments.

Please note that this was just a simplistic model, which evidently proved ineffective in this case. Note that there are two adjustments that might need to be made:

- Supermax donated RM75 million worth of gloves to the Malaysian government, which cannot be captured by the model and is unpredictable.

- Even in the "worst" case described in my post, and when factoring in the donation, there is still approximately RM10 billion in exports that is unexplained. There might have been enormous items coming from newly commissioned lines of newcomers, for instance, or there could have been a blowout month of March for Top Glove.

Either case, the difference is very significant and we will have to wait for more announcements in the coming months to see where it might have come from.


cheeseburger
1928 posts

Posted by cheeseburger > May 5, 2021 11:17 PM | Report Abuse

there are not many company in Msia making 1b in 1 q. bear in mind.


CharlesT
11525 posts

Posted by CharlesT > May 6, 2021 8:50 AM | Report Abuse

But now everybody knows that ASP oredi peaked few months ago n will drop further fm now on


CharlesT
11525 posts

Posted by CharlesT > May 6, 2021 9:45 AM | Report Abuse

All the future Q results shall not make u to sleep well


CharlesT
11525 posts

Posted by CharlesT > May 6, 2021 9:45 AM | Report Abuse

Only one direction........


speakup
18350 posts

Posted by speakup > May 6, 2021 11:24 AM | Report Abuse

supermax excellent results last night also drop
what lah

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